Import tax on shrimp feed is still controversial

While the Ministry of Finance maintains its stance on tax collection and only slightly reduces the tax rate from 5% to 3% for Artemia eggs - food for shrimp breeds, the Ministry of Agriculture wants to reduce the tax rate to 0%.

At a recent conference on brackish water shrimp seed management organized by the Ministry of Agriculture and Rural Development, Mr. Truong Huu Thong - Chairman of the Board of Directors of Thong Thuan Company Limited (Binh Thuan) raised the issue: While in the US there is only one code for Artemia with the name of a product used for shrimp, when imported to Vietnam, there are 2 codes with 2 different tax rates.

"When businesses import Artemia eggs that are crushed into powder, they enjoy a 0% tax rate, but if they import whole eggs to be crushed into shrimp feed, they are taxed at 5%," Mr. Thong shared.

Workers at a shrimp seed production facility are checking the quality of 3-day-old shrimp.

Minister of Agriculture and Rural Development Nguyen Xuan Cuong said that the total value of businesses importing Artemia is insignificant, and imposing an import tax of 5% or 3% is meaningless in the shrimp export industry of 3-4 billion USD, which is in great need of quality breeds.

“National policy must be to encourage development. Feed for shrimp larvae is extremely necessary for the development of the shrimp industry. If we collect taxes at this stage - the critical stage - it will destroy the production and development capacity of the domestic shrimp industry,” Minister Nguyen Xuan Cuong stated. The leaders of the Ministry of Agriculture proposed not to collect additional taxes and reduce the import tax rate to 0% for this item.

Data from the Directorate of Fisheries (Ministry of Agriculture and Rural Development of Vietnam) also shows that domestic demand for Artemia eggs is about 200 tons, domestic production meets 20% of demand, the rest must be imported.

However, in a document sent to the press, the Ministry of Finance still maintains its stance of collecting taxes from businesses importing Artemia eggs and only adjusting the tax rate down from 5% to 3%.

Citing the report data of the Customs Departments of provinces and cities in the past 6 years (2009 - 2015), the Ministry of Finance said that there were about more than 30 enterprises importing Artemia eggs. Of which, about more than 20 enterprises importing with a turnover of up to 84% of the total import turnover of this item declared code 0511.91.00 (tax rate 5%) and less than 10 enterprises importing with a turnover accounting for 15% of the total turnover declared in group 23.09 (tax rate 0%).

"The customs' action of collecting additional taxes from businesses that declare incorrect codes is in accordance with the law and ensures fairness for businesses that have imported this item," the Ministry of Finance affirmed.

Regarding import tax rates, according to the regulations in the Tax Rate Schedule issued by the National Assembly Standing Committee, the highest rate for Artemia eggs is 5%, the WTO ceiling commitment is 5%. However, after considering opinions from the Ministry of Agriculture and Rural Development and related ministries, the Ministry of Finance will reduce the import tax rate for Artemia eggs for shrimp feed from 5% to 3% to both encourage reasonable protection of domestic production and encourage the development of shrimp seeds.

However, the Ministry of Agriculture and Rural Development wants to reduce the import tax on Artemia eggs to 0% because this is a very necessary food, specific to the domestic shrimp seed production industry. According to Minister Nguyen Xuan Cuong, shrimp will be an immediate space for recovery to partially offset the growth of the agricultural sector in the last 6 months of the year.

"That's for now, but the current shrimp strategy is considered a strategic commodity of ours," Minister Nguyen Xuan Cuong affirmed.

To help shrimp seed production enterprises overcome difficulties, Minister Nguyen Xuan Cuong directed Deputy Minister Vu Van Tam to work with the Ministry of Finance.

Sharing with the press, Deputy Minister Vu Van Tam said that immediately after the Ministry of Finance issued information about collecting additional taxes on Artemia eggs, the Ministry of Agriculture and Rural Development sent a document to this agency, requesting the Ministry of Finance to consider not collecting additional taxes and adjust the tax rate and import tax on Artemia eggs used as feed for shrimp to 0% to support the development of Vietnam's shrimp industry.

"If the Ministry of Finance has not resolved the issue and it affects competition and increases costs for businesses, we will propose to the Government to resolve this issue as soon as possible," Deputy Minister Tam emphasized.

According to VNE